Jeff Nielson: Informed precious metals investors are well aware of the tremendous “squeeze” placed upon gold demand in India, via the draconian suppression of imports. Regular readers of my work understand that this gold-squeeze was, in fact, instigated by the One Bank – through placing enormous pressure on India’s government.
This economic blackmail took the form of attacking India’s currency, the rupee, in global currency markets, and driving its value to record-lows, until the government of India capitulated. With the global rigging of currency markets (by these same Banksters) now being fully-exposed; this is nothing more than “business as usual” for the One Bank.
But as readers are frequently reminded, actions have consequences. When the supply of gold to the world’s largest precious metals market (and most-astute precious metals investors) was severely restricted; Indians switched to silver – and in a big way.
Even by June of this year, the Indian stampede into silver was already apparent. As noted in a previous commentary; it was at that time that the One Bank was maximizing its efforts at Indian gold-suppression (resulting in a total ban on imports) because monthly Indian gold imports had exploded to an annualized rate of around 2,000 tonnes/year.
In the silver market meanwhile, by the end of May; India had already imported over 2,400 tonnes of silver to meet surging demand, versus 1,900 tonnes in all of 2012. By the end of October, India’s total silver imports amounted to over 4,600 tonnes. Barring a complete collapse; 2013 silver imports in India will hit an all-time high – eclipsing the previous high-water mark of 5,048 tonnes, set back in 2008.
Astute silver investors will recall that in 2008 the price of silver had also been “crashed” roughly 60% below previous highs. However, back then India’s silver imports dropped off abruptly after that. Total silver imports in 2009 and 2010 combined amounted to significantly less than the 5,000+ tonnes imported in 2008.
But note that in 2009 and 2010 the price of silver was rising dramatically, roughly tripling in price during those two years, and at that time there were no restrictions of any kind on India’s gold market. Actions have consequences.
Having driven Indian precious metals investors from gold into silver; how can the One Bank cool-off the red-hot Indian silver market (again)? It could allow the current price of silver to triple, and remove all restrictions on Indian gold imports.
One thing it cannot do is play the same currency-blackmail game which it used to force India’s government to halt all gold imports. To understand the reasoning here requires briefly reviewing how/why the One Bank was successful with its currency-blackmail in attacking the gold market.